Bitcoin Analysis: Beyond the Block – February 2026 

Today the Ainslie Research team (ainslieresearch.com) brings you the latest monthly update on Bitcoin – including the Macro fundamentals, market and on-chain technical metrics and all of the other factors currently driving its adoption and price. This summary highlights some of the key charts that were discussed and analysed by our expert panel. We encourage you to watch the video of the presentation in full https://www.youtube.com/watch?v=pSNnaTilUiQ for the detailed explanations.

Bitcoin and Global Liquidity

Bitcoin is the most directly correlated asset to Global Liquidity. Trading Bitcoin can be thought of as trading the Global Liquidity Cycle, but with an adoption curve that leads to significantly higher highs and lows each cycle. As such we look to buy Bitcoin during the ‘Bust’ phase or liquidity low, then rotate out of it during ‘Late Cycle’ where liquidity is over extended and downside protection is required (our preference is to rotate into Gold). When correctly timing and structuring the rotation, it is possible to significantly outperform ongoing monetary debasement. The Bitcoin cycle low was in November 2022, and since then the returns have been unmatched by any other major asset.

Where are we currently in the Global Macro Cycle?

Welcome to the written report for February Beyond the Block. Those who also view our Beyond the Block podcast on YouTube will be aware of our new product, the Ainslie Bitcoin Bullion Fund. In short, the fund is a wholesale managed fund that actively allocates between Bitcoin, gold, and silver, aiming to deliver strong capital growth while protecting downside risk with precious metals during Bitcoin drawdowns. Our dynamic investment approach is directly guided by the macro and liquidity cycles covered in Beyond the Block analysis, which forms the core foundation of the Fund’s investing framework and asset allocation decisions.

If you qualify as a wholesale investor and would like to learn more about the Ainslie Bitcoin & Bullion Fund, visit our official information page at https://www.ainsliewealth.com/ainslie-bb-fund.

Bitcoin now sits more than 50% below its all‑time high, a drawdown that feels jarring when you overlay it against record nominal global liquidity and still‑strong macro data. On the surface it looks like something has broken in the usual relationship between liquidity, risk appetite and Bitcoin, but when you zoom out through the full cycle lens, the picture is far more consistent than it appears at first glance.

Our macro positioning remains Early Cycle, with liquidity sitting above the neutral line and still in expansion on the index. We have had many internal discussions on the best way to interpret the macro cycle chart and its data going forward. From our point of view, the liquidity cycle has consistently pointed us in the right direction in terms of when to be ‘risk on’ and when to be ‘risk off’. Nothing has changed there. Though shallow, we maintain, as stated last month, that the liquidity cycle has likely peaked based on its current length of 65 months, which is closely linked to the average maturity of global debt.

The real debate now centres on the relative importance of inflation versus growth, which is where we get the ‘cycle’ component of this indicator. Growth and inflation have generally been reliable indicators for the business cycle. However, it is also possible we are heading into a different regime, where direct government intervention in free markets, large-scale targeted spending via ‘Treasury QE’, and the deflationary shocks of AI meaningfully change how the economy functions.

The latest 3‑month leading indicator for U.S. growth is finally doing what we’ve been expecting for some time, with PMIs clearly grinding higher and the composite signal breaking decisively above the 50 line. This is exactly what you would expect when policy is explicitly targeted at Main Street via fiscal transfers, subsidies, and tax incentives flowing straight into household and small business balance sheets rather than being trapped in financial markets. In January we argued that this bottom‑up approach would ultimately pull both services and manufacturing PMIs higher, even if the path was choppy, and that is now starting to show up in the data.

Under the surface, what we are really seeing is the impact of “Treasury QE” doing the heavy lifting for the cycle. With the Trump administration running large, targeted deficits, issuance and spending by the Treasury have become the dominant driver of demand, effectively replacing the classic top‑down QE playbook where central bank balance sheets did most of the work. Instead of reserves piling up in the banking system, cash is being pushed directly into the real economy, lifting new orders, employment, and confidence, and that’s precisely what the re‑accelerating PMIs and our leading indicator are now signalling.

Last month, we argued that a bottom‑up fiscal regime, where money is pushed directly into household bank accounts and small businesses, would keep inflation sticky and make a clean return to the Fed’s 2% target unlikely. The logic still holds over the long run, but our leading indicator is now forcing us to acknowledge a different risk in the short term, namely that powerful deflationary forces like AI‑driven productivity, excess capacity in parts of the economy, and companies aggressively cutting costs are offsetting a meaningful chunk of that deficit‑spending impulse. Put differently, it may simply take far more fiscal juice than we originally thought to generate and sustain inflation in this environment.

If our lead indicator is right, the bigger danger over the next 12–18 months may not be runaway prices, but growth rolling over into a deflation and unemployment problem. That would almost certainly pull central banks toward a more aggressive rate‑cutting path, and, if conditions deteriorate far enough, back into genuine QE rather than the quasi “Treasury QE” setup we have today. Ironically, that kind of classic QE response would be far more supportive for asset prices and global liquidity, even as it arrives via a weaker real economy – an environment Bitcoin has historically performed well in.

Where are we currently in the Global Liquidity Cycle?

Recently, the AI boom has been marked at the point where we believe this global liquidity cycle has peaked. We could be wrong, but we simply cannot see a credible source of additional liquidity in the near term that would drive this cycle meaningfully higher. It would likely take some kind of crisis, most plausibly in the debt markets, followed by an aggressive Fed response to push our index to new highs. With the average liquidity cycle running around 65 months, caution is warranted at this stage. It is entirely possible that we do not see the next true liquidity bottom until late 2026, or even 2027.

Below is a more detailed chart over a shorter time frame than the previous one. Liquidity has now pushed back above the neutral line, but the length and shape of this cycle suggest we are in the late, choppier phase rather than the start of a fresh expansion.

Global liquidity is now pressing up against a fresh nominal high, approaching US$189 trillion, but the quality of that growth matters more than the headline number. The 3‑month annualised growth rate is running at just 0.6%, so most of the 8.4% year‑on‑year gain is base‑effect math off weak liquidity in early 2025 rather than a genuine new surge in credit creation. Under the surface, the heavy lifting is being done by strong PBoC injections, steady Fed and Bank of England liquidity, firm collateral values in the US and Eurozone, and a much calmer bond market, with the MOVE index now hovering near 60, a level last seen in 2021 that boosts the collateral multiplier by allowing tighter haircuts.

Offsetting that, the shadow monetary base ticked down to US$110.9 trillion this week, with its own 3‑month growth rate slipping to 4.8% as a recovering US dollar shaved the translated value of non‑US liquidity. The Bank of Japan is still running outright QT, ECB liquidity remains low, and the dollar’s bounce has acted as a mild handbrake on conditions despite investors remaining broadly risk‑on, rotating toward Emerging Markets, particularly Asia, while trimming exposure to the US and Eurozone. Put together, this is what late‑cycle liquidity looks like, record nominal highs, plenty of cash sloshing around, but increasingly dependent on China, collateral dynamics and a soft dollar rather than a fresh, synchronised QE wave from the majors.

The MOVE index has quietly reset to levels we have not seen since 2021, and that matters far more than most headline volatility gauges. In simple terms, the MOVE tracks implied volatility on US Treasury options across the curve, so it is effectively the market’s best estimate of how wild, or calm, the so‑called “risk‑free” rate is likely to be. When the index is low, dealers and clearing houses apply smaller haircuts to Treasury collateral, which pushes the collateral multiplier higher and allows the same pile of bonds to support a much larger stack of credit and leverage across the system. That is one of the quiet reasons global liquidity can sit at record highs even while central bank balance sheets are not expanding aggressively.

The flip side is that new lows in the MOVE index are a double‑edged sword. On the one hand, they tell us collateral is being treated as rock‑solid and funding markets are relaxed, which is supportive for risk assets. On the other hand, the lower you drive rate volatility, the more the system leans on that stability, therefore any sharp spike from here would force larger hairduts, drain leverage, and mechanically tighten liquidity at the worst possible time. In that sense, an ultra‑low MOVE reading is less a comfort blanket and more a coiled spring that investors should be watching closely.

One of the biggest swing factors for global liquidity from here is still the U.S. dollar. Because so much of the world’s debt is denominated in dollars, every sustained move higher in the DXY tightens financial conditions for offshore borrowers, making their debt harder to service and effectively draining liquidity out of the system. A softer or even broadly range‑bound dollar does the opposite, easing the real burden of dollar debt and freeing up more capital to flow into financial assets.

Right now the dollar sits at the bottom of its post‑2022 range on our weekly cycle chart, but the next big macro shift is likely to come from the policy side. If weaker inflation and rising unemployment eventually force the Fed into a full cutting cycle and, in time, back to QE, that combination would almost certainly drive the DXY lower and act as a powerful tailwind for global liquidity. We are not there yet, but this is the path Bitcoin investors should be watching.

“Code Will Use Code”

As we navigate the current landscape, global liquidity is losing steam, keeping near‑term headwinds in place for Bitcoin. Yet, alongside those challenges sits a genuine horizon of opportunity in the rapid rise of crypto adoption by AI agents. The fusion of these two technologies has the potential to unlock new efficiencies, drive meaningful innovation, and gradually reshape decentralised finance by weaving intelligent automation into the existing digital currency rails.

Despite Bitcoin’s price falling more than 50%, ETF assets under management in BTC terms are only down by roughly 50,000 coins, or about 3.6%. That resilience speaks to the conviction and staying power of investors who are choosing to ride out the drawdown rather than bolt at the first sign of volatility. The lack of forced selling suggests many holders are playing a genuinely long‑term game, backing Bitcoin’s structural role even as the cycle turns against it. If that resolve holds, it points to underlying strength in the market: put simply, the new cohort of ETF investors is not capitulating.

As we look past the current liquidity cycle, it is worth noting that some of the sharpest operators in payments and fintech have been flagging a very different driver of demand for Bitcoin. David Marcus, former PayPal president turned AI‑finance founder, has been arguing for some time that in a world of autonomous agents, ‘code will use code.’ In other words, machine‑to‑machine commerce will naturally gravitate toward a neutral, programmable settlement asset, and Bitcoin is the leading candidate. Humans can keep using their preferred fiat units of account, but under the hood, AI agents are likely to settle value in sats.

Moltbook is one of the first real glimpses of what an “agent economy” might look like in practice, and it is already choosing Bitcoin as its base money. The platform functions as a coordination layer for AI agents and their humans, where skills are listed, jobs are posted, bounties are offered, and value changes hands programmatically rather than through traditional web accounts. In that environment, reputation points or internet “karma” are not enough, agents need a settlement asset they can actually send, receive, custody, and price work in, without relying on any single company or government.

This 50,000‑sat security bounty captures the shift. The poster lays out rules for finding vulnerabilities in public AI skills, then explicitly rejects the idea of launching a bespoke token, arguing that the agent internet does not need another dev‑minted coin that can rug pull and that Bitcoin is the only credible option. The logic is first‑principles as no team controls it, there is no pre-mine or VC allocation Bitcoin Lightning payments are instant and cheap, the network is global and stateless, and the currency itself is programmable in a way that fits how agents operate. And while Moltbook is framed as the “front page of the agent internet”, it is clear humans have already infiltrated the system and are posting alongside and on behalf of agents, yet across those interactions the revealed preference is the same, when both humans and code are free to choose a rail, they are converging on sats over Lightning rather than governance tokens or platform credits.

When you lay the incentives out side by side, it starts to look less like a question of if AI agents will adopt Bitcoin and more a question of how fast. Agents cannot walk into a bank branch, complete KYC, or open a custody account, so any money they use has to live natively on the internet. Bitcoin solves that constraint immediately, it is bearer, digital, permissionless, and accessible anywhere there is an IP connection, which makes it a natural fit for software that may be running in a data centre one minute and on a user’s device the next. Low fees over Lightning, high liquidity, and 24/7 markets mean agents can handle constant micro‑transactions, stream payments by the second, and rebalance in and out of BTC without waiting for a human or a bank clearing window to catch up.

Just as importantly, Bitcoin’s design lines up with the way agents “think.” A decentralised, censorship‑resistant ledger removes dependence on any single platform or jurisdiction; transparent, auditable settlement builds trust between anonymous programs, while a credibly scarce asset gives long‑lived agents a way to store value that is not constantly being diluted by human fiscal policy. Add in the growing number of networks that pay bounties and rewards in sats, plus the early evidence from places like Moltbook where both humans and agents are already coordinating around Bitcoin, and the direction of travel becomes obvious. If your economic life is entirely digital, global, and machine‑driven, the path of least resistance is to use digital, global, machine‑native money, right now, that means Bitcoin.

Conclusion

Liquidity momentum looks increasingly tired, even as the headline numbers continue to grind higher. We are late in a long global liquidity cycle, and while nominal liquidity keeps nudging to new highs, the 3‑month impulse has faded and our own index is hovering only modestly above neutral. In this regime, “Treasury QE”supports growth and PMIs but does not provide the same direct bid for financial assets that classic central‑bank QE did. Money is being pushed into households, capex and wages first, with markets picking up only the second‑order effects rather than the initial wave.

That framework also helps reconcile the apparent disconnect between inflation, the dollar and risk assets. With our own inflation indicator rolling over, the bigger near‑term risk is no longer overheating prices, but rising unemployment from efficiency gains via AI, even as PMIs tick higher on the back of government spending. If that continues, the policy path almost writes itself, rate cuts to stabilise the labour market, followed in time by genuine balance‑sheet expansion if funding or credit stress emerges. Both steps would tend to push the dollar lower over time. Given how much of the world’s debt is priced in USD, a weaker DXY mechanically eases global financial conditions, lowers the real burden of dollar debt and, in turn, pushes our liquidity indicators higher again.

Against that backdrop, Bitcoin sits in an awkward but ultimately favourable position. Late‑cycle liquidity and a still‑firm dollar cap upside in the near term, while ETF flows and on‑chain data show that the marginal holder is stubborn rather than panicked. Over a longer horizon, however, the story broadens out beyond macro cycles into structural adoption. Institutional rails, accounting, tax, collateral and derivatives are now in place, ETF investors have largely refused to capitulate despite a brutal drawdown, and a new frontier is opening as AI agents begin to use Bitcoin as their native settlement layer. If Marcus is right that “code will use code”, then the combination of weaker future dollars, recurring QE and machine‑driven demand for a neutral, programmable asset points in one direction. Cycles will come and go, but each turn of the wheel leaves a little more of the world, human and machine, transacting and settling in sats.

Watch the full presentation with detailed explanations and discussion on our YouTube Channel here:  https://www.youtube.com/watch?v=pSNnaTilUiQ

Until we return with more analysis next month, keep stacking those sats!

Joseph Brombal

Research and Analysis Manager

The Ainslie Group

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